Egypt's arbitration law is Law No. 27 of 1994 on Arbitration in Civil and Commercial Matters, amended since (including by Law No. 9 of 1997). Court litigation follows the Civil and Commercial Procedure Law (Law No. 13 of 1968). Investors also have grievance routes under the Investment Law (Law No. 72 of 2017). This guide explains the arbitration rules most contracts depend on, using the Arabic text of the Arbitration Law as published by the Cairo Regional Centre for International Commercial Arbitration (updated edition, Cairo 2021). We assist clients in Egypt from our Cairo office. Related guides are linked at the end of this article.
When the Arbitration Law applies (Articles 1 to 3)
Subject to the international conventions in force in Egypt, Article 1 applies the law to any arbitration between public or private law parties, whatever the legal relationship in dispute, if the arbitration takes place in Egypt, or is an international commercial arbitration taking place abroad whose parties agree to submit it to this law. For administrative contract disputes, the arbitration agreement needs the approval of the competent minister (or whoever exercises his powers for public legal persons), and this cannot be delegated.
Article 2 defines commercial arbitration as arbitration of a dispute over a legal relationship of an economic nature, contractual or not. The list in the article includes supply of goods or services, commercial agencies, construction contracts, industrial and tourist licenses, technology transfer, investment, development contracts, banking, insurance, transport and energy supply.
Article 3 makes an arbitration international if it concerns international trade and one of the listed cases applies. Examples are parties with their main places of business in two different states when the arbitration agreement is made, parties agreeing to use a permanent arbitration body or center based in Egypt or abroad, or a dispute that links to more than one state.
The arbitration agreement (Articles 10, 11 and 23)
An arbitration agreement is the parties' agreement to submit all or some disputes that have arisen or may arise over a defined legal relationship, contractual or not (Article 10(1)). It can come before the dispute, as a clause in a contract or separate, or after the dispute starts, even when a court case is pending. If it comes after the dispute, it must define the issues covered or it is void (Article 10(2)). A reference in a contract to a document that contains an arbitration clause counts as an arbitration agreement if the reference clearly makes the clause part of the contract (Article 10(3)).
Only a natural or legal person who can dispose of his rights may agree to arbitrate, and arbitration is not allowed on matters where settlement is not allowed (Article 11). The arbitration clause is treated as an agreement independent of the other terms of the contract. The contract's nullity, rescission or termination does not affect the clause if the clause is valid in itself (Article 23).
Challenging jurisdiction (Article 22)
The tribunal rules on objections to its own jurisdiction, including objections that there is no arbitration agreement or that it has lapsed, is void, or does not cover the dispute (Article 22(1)). A party must raise these objections no later than the time for submitting the statement of defense. Appointing an arbitrator, or joining in the appointment, does not lose the right to object. An objection that the agreement does not cover a new issue raised during the case must be made at once, though the tribunal may accept a late objection for an acceptable reason (Article 22(2)). If the tribunal rejects the objection, it can be raised again only through an annulment action against the award that ends the whole case under Article 53 (Article 22(3)).
Which court helps with arbitration (Article 9)
For matters the law sends to the Egyptian courts, jurisdiction belongs to the court that would otherwise hear the dispute. If the arbitration is international commercial arbitration, jurisdiction belongs to the Cairo Court of Appeal, unless the parties agree on another Egyptian court of appeal (Article 9(1)). That court keeps jurisdiction until all arbitration steps end (Article 9(2)). Choose the seat and the court carefully when you draft the clause.
Appointing the arbitrators (Article 17)
The parties may agree on who the arbitrators are and how and when they are chosen. If they did not agree, the law fills the gap:
- With a sole arbitrator, the Article 9 court chooses him at the request of either party.
- With three arbitrators, each party picks one. The two arbitrators then agree on the third. If a party does not name its arbitrator within thirty days of receiving the other party's request, or the two arbitrators do not agree on the third within thirty days of the later appointment, the Article 9 court makes the choice at either party's request. The third arbitrator, whether chosen by the two arbitrators or by the court, chairs the tribunal. The same rules apply to tribunals of more than three.
- If a party breaks the agreed appointment procedure, or the two arbitrators fail to agree on something they must agree on, or a third party fails to do what it was asked to do, the Article 9 court takes the step on request unless the agreement gives another way to complete it.
- The court must respect the conditions the law and the parties set for the arbitrator, and act quickly. Subject to Articles 18 and 19, its decision on the appointment cannot be appealed.
A clause that names the number of arbitrators, the way each is chosen and a fallback appointing body avoids a court application at the start of a dispute.
Interim and protective measures (Articles 14 and 24)
The Article 9 court may order interim or protective measures at the request of a party, before the arbitration starts or while it runs (Article 14). The parties may also agree that the tribunal can order the measures it considers necessary, and ask for enough security to cover their cost (Article 24(1)). If the person ordered does not comply, the tribunal may allow the other party to take the steps needed to carry the order out, without affecting that party's right to ask the president of the Article 9 court for an enforcement order (Article 24(2)). A tribunal's power to order interim measures depends on the parties' agreement, so say so in the clause.
Language and applicable law (Articles 29 and 39)
Arbitration is conducted in Arabic unless the parties agree, or the tribunal decides, on another language or languages. That choice also covers written statements, oral hearings and every decision, message or award of the tribunal, unless the agreement or the tribunal's decision says otherwise. The tribunal may order translations of written documents into the language or languages of the arbitration (Article 29).
On the merits, the tribunal applies the rules the parties agreed. If they chose the law of a state, the tribunal follows that state's substantive rules and not its conflict-of-laws rules, unless they agreed differently. If they did not choose, the tribunal applies the substantive rules of the law it finds most closely connected with the dispute. It must take into account the contract terms and the usual practice for that type of transaction. If the parties expressly authorize it, it may decide as amiable compositeur, according to fairness and equity (Article 39).
Side issues during the case (Article 46)
If a question outside the tribunal's powers comes up, or a document is challenged as forged, or criminal proceedings start over forgery or another criminal act, the tribunal may continue with the dispute if it finds that resolving the issue is not necessary for deciding the merits. Otherwise it must stop the proceedings until a final judgment is issued, and the time limit for the award stops running while it is stopped.
Depositing the award (Article 47)
The winning party must deposit the original award, or a signed copy in the language of the award, or a certified Arabic translation if the award is in a foreign language, with the clerk of the Article 9 court. The clerk prepares a record of the deposit, and each party may ask for a copy of it. The record is among the papers needed for the enforcement application described below.
Drafting checklist for an Egypt-seated clause
- Name the institution or rules, the seat and the court of appeal for Article 9 purposes (the Cairo Court of Appeal applies by default only to international commercial arbitration).
- State the number of arbitrators and how each is appointed, with a fallback.
- State the language of the arbitration.
- Choose the governing law of the contract.
- State whether the tribunal may order interim measures.
- If a state body is a party to an administrative contract, confirm that the competent minister's approval was obtained.
Time limits for the tribunal and for corrections
- The tribunal must issue the final award within the period the parties agreed. If there is no agreement, the period is twelve months from the start of the arbitration, and the tribunal may extend it by up to six months unless the parties agree to a longer extension (Article 45(1)).
- If no award comes in time, either party may ask the president of the court in Article 9 to set an extra period or end the proceedings, and the parties may then take the dispute to the court that would otherwise hear it (Article 45(2)).
- A party may ask the tribunal within thirty days of receiving the award to interpret ambiguity in its operative part, and must notify the other party of the request before submitting it to the tribunal (Article 49(1)).
- The tribunal corrects purely clerical or arithmetic errors, on its own or on request, within thirty days of the award or of the request (Article 50).
Setting aside an award (Articles 52 to 54)
Awards cannot be appealed under the Procedure Law. The only challenge is an annulment action (Article 52). An annulment action is accepted only in these cases (Article 53(1)):
- no arbitration agreement exists, or it is void, voidable or expired;
- a party lacked full legal capacity when the agreement was made;
- a party could not present its defense because of improper notice of an arbitrator's appointment or of the proceedings, or for another reason beyond its control;
- the award excluded the law the parties chose to apply to the substance;
- the tribunal or arbitrators were appointed in breach of the law or the agreement;
- the award decided matters outside the agreement, or went beyond it (only the affected parts are annulled if they can be separated); or
- the award or the procedure is void in a way that affected the award.
The court deciding the annulment action also annuls the award on its own motion if it violates public policy in Egypt (Article 53(2)). The action must be filed within ninety days of the award being notified to the losing party. A waiver given before the award does not block the action (Article 54(1)). For international commercial arbitration, the court in Article 9 hears it. For other arbitration, the court of the second instance that would hear the dispute does (Article 54(2)).
Enforcement (Articles 55 to 58)
Awards have the authority of a final judgment and are enforceable under the law (Article 55). The president of the Article 9 court, or a judge he assigns, issues the enforcement order. The application must come with the original award or a signed copy, a copy of the arbitration agreement, a certified Arabic translation if the award is not in Arabic, and a copy of the record showing the award was deposited under Article 47 (Article 56). Filing an annulment action does not suspend enforcement, but the court may order a stay on serious grounds if the claimant asks in the statement of claim. If it stays enforcement, it may require security, and it must decide the annulment within six months of the stay order (Article 57).
Before an enforcement order is issued, the court must check that the award does not conflict with an earlier judgment of the Egyptian courts on the same dispute, that it does not violate public policy, and that it was properly notified to the losing party (Article 58(2)). The law also says enforcement cannot be ordered while the time to file an annulment action is still running (Article 58(1)).
Article 58(3) originally barred any challenge to an order granting enforcement (an order refusing enforcement could always be challenged). The Supreme Constitutional Court (Case No. 92 of Year 21, hearing of 6 January 2001, published in the Official Gazette on 18 January 2001) held that bar unconstitutional. A challenge to an order granting enforcement is therefore allowed too. This is a reminder to read the current text and the case law, not only the statute's wording.
Investor grievances under the Investment Law
Law No. 72 of 2017 creates grievance committees at the General Authority for Investment and Free Zones (GAFI). According to GAFI's official description, a grievance is filed within fifteen working days of notice of the decision or knowledge of it, the committee decides with reasons within thirty days of the end of hearing the parties and receiving their views, and its decision is final and binding on the competent bodies, without affecting the investor's right to go to court. The committee is chaired by a judicial counselor and includes a GAFI representative and an expert. Under Article 84 of the Investment Law, filing the grievance interrupts the time limits for challenging the decision in court, so file it inside the fifteen working days. GAFI also describes a ministerial committee for investment disputes between investors and the state. We did not read its text and recommend checking it before you rely on it.
Read also: Egyptian Civil Code Contracts: What Surprises a Gulf Party | Mergers and Acquisitions in Egypt: Competition Approval | Dispute Resolution in Egypt
Frequently asked questions
Which law governs arbitration in Egypt?
Law No. 27 of 1994, as amended.
Which court supervises international commercial arbitration?
For international commercial arbitration, the Cairo Court of Appeal, unless the parties agree on another Egyptian court of appeal (Article 9).
How long is the deadline to challenge an award?
Ninety days from notification of the award to the losing party (Article 54(1)).
Does an annulment action stop enforcement?
No, but the court may stay enforcement on serious grounds if the claimant asks in the claim (Article 57).
Can a state body agree to arbitrate?
For administrative contracts, only with the approval of the competent minister, and the approval cannot be delegated (Article 1).
How can you help?
From our Cairo office, we review dispute clauses, advise on arbitration and enforcement, and prepare cases.